The interactions between ecological and evolutionary processes mediated through functional traits that confer habitat specialization have been proposed to explain the spatial assembly of plant communities both across space and in different habitats. However, the scale at which these mechanisms operate and their relative importance in dominance and assembly of tree communities in different habitat types distributed across spatially-varying environmental gradients in tropical forests have been rarely tested. Here, I elucidate patterns of functional trait and phylogenetic variation and evolutionary history of key functional traits conferring habitat specialization to understand community assembly mechanisms operating within in tropical tree communities distributed across spatially varying environmental gradients and in different habitat types in Western Ghats biodiversity hotspot, India. The chapter 2 focuses on patterns of functional trait and phylogenetic co-variation among a community of tropical canopy trees distributed across spatially varying moisture gradient. I find that tree communities in plots that experience lower precipitation and longer duration of dry period show clustering of both functional traits and phylogenetic relationship suggesting environmental filtering play a key role in the assembly of tree communities in these forests. The chapter 3 explores the relationship between key functional traits, phylogenetic relationship and abundance of 210 co-occurring tree species distributed across contrasting extremes of seasonal flooding gradient i.e. flooded forest and terra-firme forest (non-flooded). I found that repeated evolution of key functional traits together with strong environmental filtering play a key role in determining the ecological success (dominance) and assembly of tree communities in flooded habitat. The chapter 4 focuses on climatic niche evolution and evolutionary history of flooded habitat specialization in global and endemic Myristicaceae members in the Western Ghats. I found that, repeated gain of swamp habitat specialization and associated morphological traits in global and Western Ghats Myristicaceae implying seasonal flooding gradient is an important driver of ecological speciation. I also found that local habitat specialization promotes range-wide niche evolution among sister taxa. By elucidating the pattern functional traits and phylogenetic relationship across flooding and spatially varying moisture gradient and analysis of climatic niche evolution and habitat specialization among co-occurring sister taxa, this thesis contributes to our understanding of the determinants of assembly, dominance and diversification of tropical tree communities across diverse habitat types in tropical forest biomes